25 December 2012

Tanzania: Nation Earns U.S.$305 Million From Extractive Industries

DAR ES SALAAM, Tanzania's compliance with the Extractive Industries Transparency Initiative (EITI), which promotes greater transparency and accountability in managing oil, gas and mining sectors, is a milestone for the country's economic growth prospects.

The World Bank said extractive industries contributed $305m to government revenues in the year ending June 30, 2010, up from $99m the previous year.

The World Bank's Country Director, Mr. Philippe Dongier told East African Business Week in Dar es Salaam last week that with the new gas discoveries, revenues are expected to rise significantly in the future.

"We congratulate Tanzania on achieving this milestone, which will help translate their natural resources into inclusive and sustainable economic growth," Dongier said.

The compliance with the EITI comes at a crucial time when Tanzania has made huge gas discoveries and the public is calling for responsible management of the new resources.

Compliance with EITI means that Tanzania's EITI process, launched in collaboration between government, mining companies and civil society, has been formally recognized by the EITI's international board, which made the decision last Tuesday Dec. 11.

Tanzania thus joins 17 countries that are already compliant. Another 20 are candidates for EITI compliance.

The EITI process in Tanzania commits mining companies to publishing their payments to government and commits government to publishing the revenues they receive from these companies.

"These two sets of numbers are matched up and published, giving citizens the opportunity to know of the income generated by extracting Tanzania's natural resources like gold, natural gas, and other minerals," he said.

Tanzania became an EITI candidate country in February 2009.

In support of Tanzania's efforts, the World Bank's Oil, Gas and Mining unit has used funds contributed under a Multi-donor Trust Fund to assist the country to implement the EITI principles, particularly by increasing technical capacity of government and civil society stakeholders so their participation in the process is more effective.

Tanzania's extractive industries have experienced a boom over the past decade, notably with recent natural gas discoveries. This has attracted more investments, along with increased awareness of the need to ensure these resources benefit all Tanzanians.

With EITI compliance Tanzania sends a clear message: all stakeholders want to increase transparency and accountability in the sector, Mr Paulo de Sa, the Manager of the World Bank's Oil, Gas and Mining unit said.

"We are encouraged by Tanzania's progress and will continue to support their efforts to ensure extractive resources contribute to reducing poverty and building much needed infrastructure," Paul said.

The Oil, Gas, and Mining Policy unit (SEGOM) serves as the Bank's global sector management unit on extractive industries and natural resources across the world. It is part of the World Bank's Sustainable Energy department.

Through loans, technical assistance, policy dialogue, and analytical work, SEGOM leads a work program in more than 70 countries, of which almost half are in Sub-Saharan Africa.

To help countries implement the standard and principles of the EITI, the World Bank's Oil, Gas and Mining unit administers a Multi-donor Trust Fund. Fifteen donor partners support the EITI technical assistance program in Tanzania and across the world.

These donors include: Australia, Belgium, Canada, Denmark, the European Commission, Finland, France, Germany, Japan, Netherlands, Norway, Spain, Switzerland, UK, and USA.

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